Essar Energy Transition Fuels’ (EET Fuels) retail arm has agreed to acquire UK independent forecourt operator SGN Retail for between £400 million and £450m, in a deal that will more than double its estate and create one of the country’s largest vertically integrated fuel retail networks.
EET Retail said on Monday (14 September) that it had agreed to acquire 100 per cent of SGN Retail, adding 118 forecourts to its existing 117-site network. The enlarged estate will comprise 235 forecourts nationwide, with annual fuel throughput of more than 650 million litres.
Founded in 2016 by Graham Peacock and Susan Tobbell, SGN Retail operates roadside locations alongside retail, convenience and food-to-go brands.
Reuters reported that the transaction is valued at between £400 million and £450m, although EET Retail has not disclosed a deal value.
The transaction is intended to strengthen EET Retail’s integration with Essar’s Stanlow manufacturing complex in Cheshire, allowing fuel produced at the refinery to be supplied directly to a larger network of forecourts.
EET Retail said the acquisition would create the UK’s second-largest forecourt network that is backwardly integrated with fuel production.
The company is targeting a network of 800 forecourts by 2031, equivalent to around 9 per cent of the UK market, and said the SGN deal would significantly accelerate that ambition.
Arvan Ruia, CEO of EET Retail, said building a vertically integrated forecourt platform was a “critical pillar” of the company’s long-term UK strategy.
“SGN Retail is one of the highest-quality forecourt networks in the UK well ahead of the market,” he said. “This acquisition accelerates our plan to build a nationwide, vertically integrated platform of 800 sites, backed by direct refinery supply and delivering competitive prices at the pump for UK motorists.”
EET Retail said the integration of production and retail would improve the efficiency of fuel distribution and could reduce costs for motorists, while strengthening domestic fuel supply security by directing Stanlow-refined fuel to UK consumers.
Viral Gathani, head of strategic transactions at Essar Energy Transition, described the acquisition as a “unique, best-in-class opportunity” that advances the group’s mergers and acquisitions strategy.
“The transaction is backed by a top-tier group of banks spanning four continents, several supporting the UK forecourt sector for the first time, underscoring confidence in our backward-integrated growth model and in the UK fuels and convenience markets,” Gathani said.
The deal will be funded through a combination of cash and a new £250m debt facility.
EET Fuels operates the Stanlow Manufacturing Complex in Cheshire, which the company says produces around 18 per cent of the UK’s transport fuels.
The Mumbai-headquartered Essar Group subsidiary has an investment pipeline of £4.3 billion through 2035 to develop low-carbon energy transition projects in the north-west of England.